Sunday, May 28, 2006

Corporate Social Responsibility From the Bottom Up: Barcelona 2006

A number of commentators have written about corporate social responsibility, that is, of the efforts, usually not legal, to induce corporate actors to adopt certain moral, political or ethical practices. The latest efforts to formalize these efforts at the international level, though quite clever, were unsuccessful. See my Multinational Corporations, Transnational Law: The United Nation's Norms on the Responsibilities of Transnational Corporations as Harbinger of Corporate Responsibility in International Law.

But, law hardly ever waits for positive enactments from national or international organs. While public law dithers about, private law systems, not binding but compelling in any case, continue to shape the form of corporate governance on a global scale. I got a small taste of this recently in Barcelona where I was witness to the effectiveness of corporate social responsibility efforts "from the bottom up."

What do I mean "from the bottom up"? For the most part, most of the current focus on corporate social responsibility is with large multinational corporations and the nation-states that either protect them or that are ripe for exploitation by them. There is understandably a focus on the big actors on the largest stage of human organized behavior. That is all well and good, but many times, the more important changes in social conduct, and legal standards, percolate up from the bottom--from the small and local actors and the communities of consumers that directly influence their practices and behaviors. Corporate social responsibility campaigns are an example of a case in which action from the most local level of activity could have a significant influence on the major actors and the public institutions that respond to the "big fish."

Well, what is going on in Barcelona? The city has seen a well publicized and tightly orchestrated campaign to sensitize the public to the evils of exploitation of developing country labor. Taking the form of a "just commerce" campaign (festa de commerc just), elements of Catalan civil society have focused on exploitation in the production of sugar, coffee, cotton and cocoa. In a well funded series of events stretching over three days (from May 26 through May 28) held at the Plaça Catalunya, one of the most visible spots in Barcelona, and a place sure to attract the attention of the thousands of European and other tourists now flocking to the city, these organizations are employing an assorted number of theatre and other post modern techniques to inform passersby of the importance of this issue.

In a well written and widely distributed publication in the form of a newspaper (I avui, que compraras?), these elements of civil society have explained the evils of exploitation of workers in thos eindustries. More importantly, they have secured the pledges of a large number of local enterprises, all small by global standards, to adhere to a social responsibility standard under which they agree not to purchase and sell to consumers products that do not meet the published "just commerce" standards. And not all of them are small enterprises, for example, Carrefour, the large European retailer has signed on as well.

We are not dealing here with a bunch of "lunatic leftists" stuck in the 1970s with no place to go, marginal actor son the current world stage. Rather, this is strong evidence (especially when reproduced in one form or another throughout the developed world) of the importance of grass roots efforts in the shaping of corporate governance practices, at least to some extent. These groups are slowly pushing small, medium, and even large retailers, to adopt certain positions. To the extent that these positions affect these retailer's purchasing decisions from the larger manufacturers, it will, over time, have a substantial if indirect effect, on the practices of the larger enterprises. And that is the point. Even Wal-Mart will have to bend to consumer tastes and preferences. . . eventually, or cease to exist. Civil society is learning that while it may be more efficient to influence practices at the level of the largest enterprises, it is probably more effective to change consumer tastes and the behavior of large numbers of local retailers. Barcelona's efforts may be more gaudy than in other venues, but it is evidence of the work that is increasingly bearing fruit all over the developed world.

And what of law? Well, on one level there is nothing to say. Law permits the very actions that elements of civil society are undertaking, as well as the responses of the corporate and other actors that feel the effects of that action. None of this effects a change in the form of corporate or enterprise law, as such. But the effects may have legal ramifications nonetheless. At the lowest level, and depending on the sort of claims made by corporations adhering to the "corporate social responsibility" standards, such actors may be liable for fraud in the sale of their products in they violate the claims to adherence to these non-exploitation norms. Much more interesting may be the way in which substantial adherence to these norms may begin to create customary practice that might eventually be given legal effect, either in contract or as a matter of evolving standards of international law and practice.

In any case, it pays for lawyers to continue to watch the efforts of these elements of civil society "from the bottom up." This may well be the most important sector effecting changes in corporate practice affecting multinationals.

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